July 07, 2011 12:09 AM UTC

Wham! Hickenlooper Sacks Gaming Commission Over Casino Tax Cut

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• by: Colorado Pols

UPDATE: Reports FOX 31’s Eli Stokols, who do you suppose might take issue with this decision on behalf of the casino industry? Why, GOP House Speaker Frank McNulty, naturally!

Republican House Speaker Frank McNulty, among others in his caucus, were dismayed by the governor’s decision.

“Gov. Hickenlooper certainly didn’t consult us before making this sweeping and arbitrary use of power,” McNulty said to FOX 31 Denver.

“Whomever is on the commission, they need to realize that families, small businesses and entire communities rely on the jobs and revenue that the gaming industry creates. If the governor’s new appointees do an about-face on these employers, families and communities will suffer.”

So, who “suffers” if the casinos pay the same taxes they paid before this arbitrary decision to cut them? We know who won’t be “suffering” more, and that’s our community colleges–most voters care more a bit more about the health of colleges than casinos.

If this does turn into a political battle between Hickenlooper and the GOP, the GOP will lose. And Hickenlooper knows it. As for McNulty’s whiny “he didn’t consult us” statement–why would Hickenlooper seek McNulty’s opinion here? Coloradans elected Hickenlooper as their governor–not Tom Tancredo, and certainly not Frank McNulty–and these are the types of decisions a governor makes. Hickenlooper is under no obligation, not even as a courtesy, to put in a call to anybody at the state legislature before making a decision like this.

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We spoke a few weeks ago about a vote by the Colorado Limited Gaming Control Commission to cut taxes paid by the casino industry–a decision made on the pretense of “tough economic times,” but which stoked outrage from many over the preferential treatment for the industry only two years after Colorado voters approved much higher bet limits to increase revenue. Beneficiaries of these gaming funds like the Colorado Community College System cried betrayal: stakeholders didn’t join with casinos to pass Amendment 50 in 2008 only to have the industry turn around and ask for a tax cut. The appearances here were straight-up awful.

As the Denver Business Journal reports today, this vote to cut casino taxes was a bridge too far for a commission that serves at the pleasure of Gov. John Hickenlooper, who creditably understood the terrible political folly taking place where commission members did not.

Gov. John Hickenlooper replaced all five members of the Colorado Limited Gaming Control Commission with new appointees on Wednesday.

The commission decides on regulations for casinos in Colorado, which are allowed to operate in three mountain towns.

The shakeup comes about seven weeks after its previous members decided to lower taxes paid by casinos. Hickenlooper disagreed with that decision.

In his statement today, Gov. Hickenlooper makes it unusually clear that this ill-advised vote to cut casino taxes in the middle of a fiscal crisis is the reason why the commission was ousted:

Each of the appointees will be new to the Commission. One current member reached the end of a second four-year term and was not eligible for reappointment; one member reached the end of a four-year term and did not reapply for a second term; and three members were asked by the governor to step down…

“We don’t believe the Colorado gaming industry should be judged reasonably unprofitable or unhealthy at a time when some casinos are making major multi-million dollar investments in one of the worst economic periods in our nation’s history,” Hickenlooper said. “Gaming should be subject to the same risks and rewards of operating and expanding as other industries that don’t have the same ability to change their tax rate based on market conditions. Colorado casinos pay among the lowest tax rates in America, and to lower them even further in these times of unmet needs in local communities makes it appear they are diverting their fair and rightful obligation onto their neighbors in the rest of the state.”

Any way you look at this: fairness, corporate honesty, or just plain realism in approaching our state’s complicated fiscal problems, the decision by the LGCC to cut casino taxes in the middle of a budget shortfall was a horrible move for everyone involved. We didn’t believe anything could be done about this bad decision except complain and count the losses to education and other priorities; but then John Hickenlooper reminded everyone who is governor of this state.

We know a lot of people who will be very happy to see that.